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How to buy property in Queensland under the land tax threshold

 

How to buy property in QLD under the land tax threshold.

All information was recorded at a date to reflect the current situation.
This is not to be taken as advice but, mealy an example.
Things may have changed so you must consult a professional you must seek independent advice.
eg. Account or Lawyer to verify this and any other information.
We suggest Pacific Law

Source https://www.qld.gov.au/environment/land/tax/calculation/companies

Calculating land tax - rates for companies and trustees – Land tax is paid after the land value is assessed at over $350,000

This does not constitute legal advice

  • A company or trustee is liable for land tax if the total taxable value of their land,  $350,000 or more.
  • Let's say you buy Property A in a company trust you call A Pty Ltd ATF A Trust, then you buy property B in the same trust A Pty Ltd ATF A Trust.



  • Property A is valued at $200,000 land value and property B is valued at $200,000 land value so it equals $400,000 which is above the threshold.
  • The issue is if you buy two properties in the same trust with trustee then you just went over $350,000 threshold and you pay a rate of land tax
  • This does not constitute legal advice
  • A company or trustee is liable for land tax if the total taxable value of their land,  $350,000 or more.
  • You pay land tax

    NOW HOW DO YOU STAY UNDER 

  • But if you buy Property A in a company trust you call A Pty Ltd ATF A Trust,
  • Then you buy property B in the new trust B Pty Ltd ATF B Trust
  • Property A is under $350,000 and then Property B  is owned in a different trust called B Pty Ltd ATF B Trust
  • A Pty Ltd ATF A Trust owns Property A is valued at $200,000 land value

  • B Pty Ltd ATF B Trust property B is valued at $200,000 land value so it is under the threshold.

  • The issue is if you buy two properties in the same trust with trustee then you just went over $350,000 threshold and you pay a rate of land tax

    Issues :
    1. If the person/ company is overseas you will pay land tax
    2. If the beneficiaries are overseas you will pay land tax
    3. If you trust does not say anything about distribution not going to an overseas beneficiary you will pay land tax

    Foreign Companies.
    From 30 June 2019, if you are a foreign company or trustee of a foreign trust a surcharge of 2% on taxable land valued at $350,000 or more applies in addition to these land tax rates.

    https://www.qld.gov.au/environment/land/tax/calculation/threshold
    In Queensland, trust land is registered in the name of the trustee

    As a trustee, you are liable for land tax if the total taxable value of the freehold land held for that trust is $350,000 or more.

    When calculating your total taxable value, we will not add the value of land held for one trust to the value of any other land you hold as:

    trustee of another trust, unless it is a cloned trust an individual or company.

    Public Ruling LTA020.1.2 Assessment of trustees under sections 20 and 22A of the Land Tax Act 2010
    Ruling and explanation
    Where the registered and beneficial owners of the land are not the same, land tax is assessed under s.20 of the Land Tax Act on the basis that the land is held on trust and the trustee is liable for the tax.

    http://www8.austlii.edu.au/cgi-bin/viewdoc/au/legis/qld/consol_act/lta201090/s20.html

    LAND TAX ACT 2010 - SECT 20 Separate assessment of trust land

    LAND TAX ACT 2010 - SECT 20

    Separate assessment of trust land

    20 SEPARATE ASSESSMENT OF TRUST LAND

    (1) The liability for land tax of a taxpayer who is a trustee of a trust must be separately assessed on the taxable land that is subject to the trust as if that land were the only land owned by the taxpayer as a trustee.

    (2) However, subsection (1) does not apply if—

    (a) the taxpayer is the trustee of more than 1 trust; and

    (b) the interests of the beneficiaries of 2 or more of the trusts are, when the taxpayer’s liability for land tax arises, the same.

    (3) If subsection (1) does not apply, the taxpayer’s liability for land tax as trustee of the trusts mentioned in subsection (2) (b) must be assessed on the total taxable value of all taxable land that is subject to those trusts.

 

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